By Martin (Econ PhD) and Yonatan (reads some Econ stuff online sometimes)
|This is a Draft Amnesty Day draft. That means it’s not polished, it’s probably not up to my standards, the ideas are not thought out, and I haven’t checked everything. I was explicitly encouraged to post something unfinished!|
|Commenting and feedback guidelines: I’m going with the default — please be nice. But constructive feedback is appreciated; please let me know what you think is wrong. Feedback on the structure of the argument is also appreciated.|
- Improving economic literacy with voters could be a cost effective way to improve policy decisions.
- Israel is an interesting case study - a few bloggers are managing to (from Yonatan's subjective point of view) influence voters and policy.
- This intervention is really cheap: I doubt the spending is over $200k per year for all orgs and people working on this, combined.
- I don’t pretend to prove anything (I didn’t run an RCT between [Israel with these bloggers and orgs] and [Israel without these bloggers and orgs]), but I do hope to pitch “this is interesting, I hope someone will look deeper into it, the potential leverage here is too big to ignore”
- Does this seem interesting enough to look more into?
Just after posting I saw the tweet below. It's a good example of a relatively complicated thing that is being communicated by these bloggers and I think is well worth it:
For people listening to this post: The tweet shows the prices of various products over time. Products shown to get more expensive "are both restricted in supply and subsidized in demand by the government".
Edit: Maybe this tweet isn't so good, see this comment
Don't forget to practice Effective Skipping! If a title doesn't seem interesting, skip it!
This seems to work in Israel (and so I think it's not impossible to do)
TODO: This would be the main section of the post, listing out what I see as successes of the ECON bloggers in the last years, which I didn't get around to collecting, and so I never posted this.
The overview would include:
- Making it cheap to import products, including "basic" food, which would give customers cheap quality things to buy instead of protecting local manufacturers.
- Saving money for the government ( = the tax payers) by allowing it to buy cheap quality products like asphalt and busses (instead of agreeing to pay certain companies a lot more for the same quality product).
- Reduce cost of doing business, for example by allowing producers to have EU or US approval of product safety, instead of having Israel-specific standards (for example, safety standards for pampers).
Sorry I don't have a tidy list of achievements. If this post gets interest, this seems like the main thing to add.
Why I think changing economic policy a good idea in theory?
- It's high leverage.
- Bad economic policy decisions are a tragedy of the commons: it doesn't hurt any one actor enough for it to be worthwhile to fight back. In other words, there's no way to make a billion dollars from managing to save the economy 100 billion dollars, and so (almost) nobody even tries.
Does this interact with other cause areas?
It could be efficiently addressed with carbon taxes. The main bottleneck for carbon taxes is voters not liking them. Teaching Econ 101 would address that.
Global health and wellbeing
If a country has problems caused by poverty, one great solution could be - make it more rich.
Spreading the EA "mindset"
Thinking like an economist and thinking like an EA are things that overlap. I’d be very happy if the public would think a bit more in EA terms.
Reasons for EA not to try this intervention
- It touches on politics, there are downsides in making EA political.
- It's high variance.
- There's a long feedback loop between action and policy change.
- It's helping a 1st world country
- (though I think the cost effectiveness is so high that it might be worth it anyway. Does anyone have estimates for how cost effective it would have to be?)
- Will this transfer well to other countries? I don't know
Does this seem worth looking into?
Here are some questions that come to mind when I consider whether this is a suitable cause for EA:
- If the cost effectiveness is $1 spent to $10,000 saved around the country, is that good enough? If not, what's the cutoff?
- How would you measure this?
- By the success so far?
- By the potential?
- By vetting (or funding) a specific more measurable part? (there are smaller interventions here, like allowing employees of a company to chose not to be unionized if they don't want to, I can elaborate. Israel has some strange laws around unions)
- If this works, is it worth trying to do in another country?
- (Is the new Israeli government going to undo all the good economic policy that was done by the previous government?)
Remember this is super drafty!
But I took the nudge to post even though I still have missing sections here.